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Workers' compensation provides financial protection to businesses. If an employee suffers an injury resulting from the work they do, this policy covers some or all of their losses. This minimizes the financial loss your business may suffer. Some states require businesses to maintain this insurance. If so, it is important to have proper protection. Here is where to start.

What Factors Apply to Your Requirements?

safety gear with sign behind saying be safe at work

States have different laws regarding workers' compensation insurance. In some states, the requirement is clear - all employers need to maintain a policy. In others, there are limitations. Your first step should be to determine the requirements in your state. Your business insurance company can provide very specific information here.

Keep in mind that even if not required, workers' comp can still be a valuable asset for you. It offers protection from financial loss that can amount to thousands of dollars.

What Some States Require

The rules to remain in compliance vary from one state to the next. If you fail to maintain coverage, you may face a fine. Here are a few things to think about:
  • Some states require workers' comp if the company has more than five, 10, or another set number of employees. Failure to maintain this insurance results in fines. For example, in New York, all companies with at least five employees must maintain coverage.
  • In some states, such as Pennsylvania, if you don't carry coverage, it can result in a felony charge. This includes if you fail to disclose the true number of employees you have.
  • In California, Illinois, Massachusetts, Michigan, and Pennsylvania, failure to carry proper workers' compensation insurance can result in criminal charges. This may mean fines and jail time.
  • Texas is one of the only states that does not require employers to maintain this coverage. However, it does still hold employers liable for employee injuries in most circumstances. Employers therefore should carry coverage.
As you can see, maintaining proper workers' compensation insurance is critical. It safeguards your company financially and ensures you meet compliance requirements.

How to Ensure You Don't Make a Mistake

If you are unsure if you need workers' comp, call your business insurance agent. Discuss the type of business you run. Talk about the number of employees you have.

Think about the risks. Can employees suffer injuries? Could someone get sick? Chances are, the can at any time. Proper insurance is not just about compliance.

It is also about keeping your company safe. It does not have to be hard to get this coverage. Most states offer competitive insurance policies. You can find affordable policies that fit your needs. Then, you do not have to worry about an employee injury on the job.

If you need workers' compensation insurance coverage, contact Insurance Planning Service today at 734-421-9900.

Also Read: Reducing Worker Falls on Icy Outside Surfaces

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NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
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Lighthouse Group Main Office in Grand Rapids, MI
Mailing Address | P.O. Box 530009, Livonia, MI 48153

Phone: 734.421.9900 | Toll Free: 800.220.5582 | Fax: 734.421.9911

Also serving these Detroit area communities in Michigan: Livonia, Farmington Hills, Ann Arbor, Southfield, Plymouth, Canton, Westland, Northville, Novi, Dearborn, South Lyon & Walled Lake